Years you plan to stay in the home Recommended program
1-3 years 3/1 ARM, 1 year ARM or 6 month ARM
3-5 years 5/1 ARM
5-7 years 7/1 ARM
7-10 years 10/1 ARM, 30 year fixed or 15 year fixed
10+ years 30 year fixed or 15 year fixed
 
Loan Program Advantages Disadvantages
Fixed Rate Mortgages    
  • 45 year Fixed
  • 40 Year Fixed
  • 30 year Fixed
• Monthly payments are fixed over the life of the loan • Higher interest rate
     
  • 15 year Fixed
•Interest rate does not change • Higher mortgage payments
     
  •Protected if rates go up • Rate does not drop if interest rates improve
     
  •Can refinance if rates go down  
 
Loan Program Advantages Disadvantages
Adjustable Rate Mortgages  
     
•10/1 ARM
 • Lower initial monthly payment
 • More risk
 
• 7/1 ARM • Rates and payments may go down if rates improve • Payments may change over time
 
• 5/1 ARM • May qualify for higher loan amounts • Potential for higher payments if rates increase
   
• 3/1 ARM • 30 year term, no balloon payment  
     
• 1 year ARM    
     
• 6 month ARM    
     
• 1 month ARM    
     
Loan Program Advantages Disadvantages
Balloon Mortgages  
7 year Lower initial monthly payment Risk of rates being higher at the end of the initial fixed period
5 year Lower payment for a predetermined period of time Risk of foreclosure if you cannot make balloon payment, refinance, or exercise the conversion option
Many balloon mortgages offer the option to convert to a new loan after the initial term Balloon payment requires you to sell or refinance after the term, as opposed to a 7/1 or 5/1 program with a 30 year term
     
Loan Program Advantages Disadvantages
First Time Buyer Programs Lower down payment May be subject to income and property value limitations
     
  Easier to qualify Some government subsidized programs may generate a recapture tax if you sell the house too soon
     
  Lower rates may be available Education courses may be required to qualify for these loans
     
Loan Program Advantages Disadvantages
Stated Income Programs Don't need to verify income Higher rates
     
  Faster approval Higher down payment
     
  Good for borrowers who may not qualify with a full income documentation program  
     
Loan Program Advantages Disadvantages
Interest Only Programs You have several payment options Higher rates
     
  Lower monthly payments Principal loan balance will not decrease during the interest only payment period
     
  Qualify for a higher loan amount Payment will be higher for the remaining term
     
  Qualify at the interest only payment  
     
  Option to pay the full normal payment  
     
  Interest only payments for up to ten years  
     
Loan Program Advantages Disadvantages
No point, No fee Programs No out-of-pocket loan costs at closing Higher rates
     
  Closing costs are paid from the lender rebate Higher payments
     
  Less money required to close Some lenders may have a short payoff penalty which is usually charged to the loan broker, but may be passed on to you
     
  Refinance without increasing your loan amount Some require a prepayment penalty for the first one to five years
     
Loan Program Advantages Disadvantages
Imperfect Credit Programs Potential for reestablishing credit if you pay your mortgage on time Higher rates
 
  When used for debt consolidation, you may be able to reduce your monthly debt payment Terms may not be as favorable
 
  Harder to get long-term fixed loans
 
  Loans may have prepayment penalties
     
Loan Program Advantages Disadvantages
Home Equity Line of Credit You only borrow what you need Rates can change. The maximum interest rate can be relatively high
     
  Pay interest only on what you borrow Payments can change
     
  Flexible access to funds Harder to refinance your first mortgage
     
  Interest may be tax deductible  
     
  May be free of closing costs  
     
  A good source for an emergency fund, if set up in advance  
     
  Can be used for debt consolidation and lower payments  
     
  Rates are usually lower than consumer loan or credit card rates  
     
Loan Program Advantages Disadvantages
Home Equity Fixed Loan Fixed payments Higher interest rates compared to first mortgage
     
  Interest may be tax deductible Harder to refinance your first mortgage
     
  Get cash out for any purpose Interest is paid on the entire loan amount, compared to an equity line of credit
     

In addition to our standard loan programs, you may benefit by obtaining one of our many special programs:

  • Purchase your home with no down payment.
  • Piggyback loans: 80-10-10 or 80-15-5. Avoid PMI payments.
  • Debt consolidation programs.
  • Home Improvement loans.
  • You may qualify even if you've been turned down before!
 
Office:  704-663-1302   Fax: 704-746-3179